As entrepreneurs, owners, and managers, we’re all often faced with times when we must consider the viability, or lack thereof, of our business, business model, or marketplace. When things just aren’t working like they used to, do you shift gears with product or restructure? Or, do you call it quits?
The green industry is no stranger to business closings. Google “nursery closing” and you’ll be faced with a fair number of results on very recent closings of prominent growers and garden centers. It’s hard to keep up with new closings these days. In fact, I was myself caught off guard just now when I pulled up Google and discovered that Yucca Do Nursery, a unique grower of natives here in Texas, just closed shop a few weeks ago. They placed an elegantly written statement addressing their closure, with reasons including a changing marketplace, changing people, and climate and water concerns. In their words, “The nursery business is a tough one littered with the debris of failed startups and the abandoned, dilapidated ruins of greenhouses that held them.” Brutal.
This is not to say that there aren’t many great growing operations out there that are doing things right and making money. But, I think it’s fair to say there are a lot of growing operations out there doing things the same way they’ve been doing them for the last 30 years … and with the very same structures and equipment. A reluctance to innovate, or a lack of funds to do so, has put many in our industry into what looks like a bubble frozen in time.
So, how do you know if it’s time to shake up your products, services, and processes … or close up shop? There are, of course, several simple indicators as to a business’ health — and that of the owner. Are you hitting your sales projections? Are you putting your own money into the business, or running up debt? These are two clear signals your business is not financially sustainable. Of course, many businesses will weather times of non-growth or short periods where they may need to carry some debt. But if this is an ongoing condition, then it’s time to look at long-term viability.
As an owner, it’s also your personal health that may be at stake. Are you still passionate about the work you’re doing? Or do you feel relieved when you think about shutting down or selling the businesses? If you’re working yourself into illness, it may be time to let go, or at least pass the torch to new management.
Are you too personally invested in what and how you’re selling because it’s important to you, without realizing your customers don’t care about the same things you do anymore? If you love your product more than your customers do, you’re in trouble. Sometimes, it’s a lack of understanding of the changing marketplace that’s crippling you. Customers are different than they used to be, and they may need different things from you. Not to mention, your marketing must also change to reflect current market trends. Refusal to change and innovate can cripple businesses over time. The growing operations I see that are doing really well are the businesses that are investing heavily in innovation and technology right now.
Sometimes closing up or selling out aren’t your only options. Changing your business model in a way that reinvigorates you, and could reinvigorate profits, could be the answer. Small iterations that stay in tune with your original model and goals can sometimes give you the leg up you need: updating your production selection, adopting technology, employing a new marketing strategy, or completely flipping your staff. But sometimes you need to turn things on their head with a totally new business model and value proposition. We call this The Pivot. Pivoting is especially important if legal issues, regulations, or big changes in the marketplace make your current operation unsustainable.
An example of pivoting could mean shifting from a business that grows all tropicals to an all-natives water-wise plants purveyor. It could mean shifting from wholesale to direct retail, or vice versa. Or, it could mean you stop growing plants altogether and instead offer related maintenance services. It’s a big shift forced by marketplace realities. The trick is, you have to pivot fast enough to recapture market share. Clutch your old failing business model to your chest for too long, and you’ll miss your chance.
If you’ve decided as the business owner that your heart or health just aren’t up to keeping the business running, why not first turn to your employees? Selling your company to a group of employee investors can be just the shot in the arm the business (and you) need to get back on the right track.
Legacy shouldn’t always drive future business decisions and you don’t really owe anything to the past. Knowing when to say goodbye, or at least when it’s time for a total makeover, can be your key to a bright business future.